The car giant started by marrying the daughter of the king

Chapter 418: An event that shocked the world, a sign of a historical turning point
The emergence of Hongqi BMW not only made Shenzhen feel a certain sense of crisis, but also put great pressure on several other car companies.

Especially Volkswagen and Toyota, they have joint ventures with FAW.

"President, the Crown sedans produced by our joint venture in China are currently producing less than 500 per month."

"The direction that FAW originally discussed with us was to promote the localization of parts to the greatest extent possible, reduce the use of foreign exchange, and thus increase production."

"But because the strength of Chinese parts companies is too weak, we need to spend a lot of manpower and material resources to purchase qualified parts."

"So the progress in this regard has been very slow, and the localization rate of Crown sedans is less than 10% at present."

"From what I understand, the situation is similar for the Jetta sedan produced by Volkswagen in cooperation with them."

"Now they have suddenly established a joint venture with BMW Group to develop a new generation of Hongqi sedans. I think it will definitely have an impact on the sales of Crown sedans in the future."

As the head of Toyota Motor's sales division, Shoei Saito has a relatively good understanding of the situation in various automobile markets.

China has a population of more than one billion. Although the current car sales are not very large, the potential is huge, and Toyota also attaches great importance to it.

Especially in the American market, Toyota has been constantly targeted in recent years. After hitting a wall several times, the company has also begun to appropriately adjust its strategy.

"Hongqi cars are mainly used as official vehicles in China, and official vehicle purchases account for the largest proportion in China's auto market."

"Once the new Hongqi sedan is launched, it will definitely affect the performance of the Crown sedan in the official car market."

"We can communicate with FAW to speed up the localization of the Crown sedan."

"Only by increasing the sales of Crown sedans can we resist this impact."

Shoichiro Toyoda made a decision quickly.

It is impossible for them to withdraw from the Chinese market just because of the emergence of Hongqi BMW cars, so they need to think carefully about how to stabilize their situation to the greatest extent possible before the other party's new models are launched on the market.

To put it bluntly, at this time the initiative shifted slightly to FAW.

Toyota must make some appropriate concessions.

"If Hongqi sedans cooperate with other car manufacturers, there is nothing to worry about."

"But if we cooperate with BMW Group, then we really need to pay attention to it."

"Whether it is the production of Mercedes-Benz cars or the development of a new model by the BMW Group for the joint venture, it is estimated that it will be a very competitive product."

"That Jiang Hui has never disappointed anyone in terms of car styling design."

Saito Shoei is quite wary of the development of the BMW Group.

Although in terms of company size, Toyota Motor is much larger than BMW Group.

However, the current Land Rover G Series and Land Rover X Series have brought great impact to Toyota's LC70 and Hilux.

Especially in the American market, sales of these two Toyota models have dropped to less than one-third of their peak period.

This decline is absolutely exaggerated.

Similarly, in the Middle East market, sales of these two Toyota models also declined sharply.

In other words, the domestic market in Japan has basically not been affected.

But the domestic automobile market in Japan is very strange. The main best-selling products here are various small cars, even so-called "light automatic cars".

The sales of large models such as LC70 and Hilux in Japan are almost negligible.

"The Chinese auto industry was originally a stagnant pool, so there is a big piece of fat waiting for everyone to share."

"But the emergence of the BMW Group has completely changed the situation."

"In the future, we will also need to conduct some targeted research and countermeasures for BMW Group's models."

"I have a feeling that in the next few years, the competition between us and BMW Group in the international automobile market will become increasingly fierce."

After Shoichiro Toyoda said this, Shoei Saito's attention to the BMW Group increased by several levels.

If the president specifically reminded him but he didn't take any action, he would be criticized when he was really affected in the future.

……

"Wellman, are you saying that Hongqi BMW Automobile Co., Ltd. will introduce a mid-to-high-end sedan from the BMW Group specifically for the Chinese official car market?"

After listening to the report on the latest operating conditions of FAW-Volkswagen made by Mr. Schmidt, who had specially returned to China, he quickly became interested in the Hongqi BMW matter mentioned by Executive Vice President Wilman.

The reason why Volkswagen Group chose to establish a joint venture with FAW Group after cooperating with the Shanghai Automobile Manufacturing Plant was because it saw the special influence of FAW in China.

That's why we established a joint venture after making concessions on many cooperation conditions.

Volkswagen has high expectations for the Chinese automobile market.

But now he felt the crisis.

He had specifically listened to Lucas's report from Shanghai Volkswagen on what kind of company the BMW Group was.

Now that such a newly emerging automobile company has cooperated with FAW, this joint venture will be almost invincible in China.

Combining FAW's administrative resources with BMW Group's market vitality, even Schmidt has no confidence that he can outsmart the other party in the Chinese market.

"Yes, it is said that the new car is expected to be launched in the market the year after next, and its positioning will be slightly lower than the Mercedes-Benz sedan under the BMW Group."

"According to the information I have speculated, this model will be equipped with a powertrain provided by Nanshan engine and Nanshan gearbox."

“Although it cannot be compared with our most advanced powertrain, its various parameters can be considered to be at the international mainstream level.”

"Coupled with the BMW Group's strengths in car exterior design, this new model of Hongqi BMW is likely to become the best-selling sedan in the Chinese market."

Wilman described the dangers of the Red Flag BMW as very serious.

In this way, he will be able to provide a reason to explain any impact on FAW-Volkswagen's operations in the future.

"According to what you said, isn't this car's direct competitor our Audi 100?"

"Its size is probably comparable to the Audi 100, but the price will be lower."

"This will directly affect our Audi 100 sales."

Volkswagen currently cooperates with FAW on two main models, one of which is the Volkswagen brand Jetta model.

Another one is the Audi 100 of the Audi brand.

As a brand new attempt, Audi 100 was the first luxury car assembled in China.

At the beginning, the sales price was as high as 500,000 or 600,000 yuan. Now the price has dropped, but it still costs more than 400,000 yuan.

According to Volkswagen's plan, once the localization rate of Audi 100 is further increased, the price can be reduced to more than yuan.

But no matter which price it is, it is much higher than that of a Mercedes-Benz sedan.

Not to mention that the positioning of Hongqi BMW's new models is slightly lower than that of Mercedes-Benz sedans.

That would be even more troublesome.

One Audi 100 can buy two new Hongqi BMW models.

No one would believe that this had no impact.

At this time, Audi is a luxury brand, and Hongqi and BMW do not have enough brand influence.

It may be useful in overseas markets, but in the Chinese market, the effect is estimated to be very limited.

At least in the period when official cars were the main vehicles, the impact was limited.

Unless the proportion of individual car purchases increases significantly in the future, perhaps people will accept the premium of the Audi brand.

But by that time, Hongqi BMW would have already become a big name.

This is a situation that Smith does not want to see.

"Yes, I think so too."

"So the top priority is to quickly increase the localization rate of Audi 100 and reduce the price to a level similar to that of Mercedes-Benz sedans."

"That way our sales in China will be guaranteed."

The only thing Wilman could think of at this time was to lower the price of Audi 100.

This is the only way to ensure the competitiveness of your products.

Otherwise, for China today, the price is too high.

Even if it is a government car, there is a budget for it.

Not to mention that FAW will most likely give priority to selling the new Hongqi BMW models to relevant units for use as official vehicles.

"Whether it's an Audi 100 or a Jetta, or a Santana from Shanghai Volkswagen."

"Their localization speed needs to be improved."

"In addition, we can also discuss engine factory cooperation with FAW and Shanghai Automobile Manufacturing Plant."

"Haven't they always hoped that we would also assemble and produce the engines in China?"

"We'll give them our word!"

Schmidt knew that in order to truly reduce the cost of several models such as Audi 100, full localization was the most critical link.

However, if key components such as engines and gearboxes are not domestically produced, the contribution that other parts can make will be limited.

"To invest in a new engine factory, FAW will definitely have to pay a considerable price."

"All these costs have already been paid, and they certainly hope that the sales of related models will be better."

"To a certain extent, this can indeed offset the impact of the establishment of Hongqi BMW Automobile."

Wellman felt that Smith's plan was much better than he had expected, so naturally he had no objections.

This time he came back specifically to make a report, essentially asking for support from the headquarters.

"The Chinese economy has developed very rapidly in recent years, and more and more countries are now interested in the Chinese auto market."

"I heard that there are also car companies in France that are in contact with China's Second Automobile Works. It is estimated that a joint venture will be established soon to produce cars."

"Over in the United States, General Motors and Ford Motor Company should not be slow to act either."

"It will definitely not hurt if we make arrangements first."

Smith became more and more certain of his original judgment.

There is great potential in China's automobile market.

"Some time ago, China announced several laws and regulations to encourage the development of private enterprises, which can be regarded as a formal affirmation of the significance of private enterprises."

"It is estimated that in the next few years, driven by private enterprises, China's economy will enter a new development speed."

"With the development of private enterprises, individual car purchases will become more and more common." "The prospects of China's auto market are indeed worth looking forward to."

Wilman naturally hopes that the car sales in China can be greatly increased, so that his position within Volkswagen can be further improved.

Otherwise, although both are general managers of overseas branches, the status of the American branch and the Chinese branch in the headquarters are completely different.

……

Compared with the reactions of Toyota and Volkswagen, the reactions of Shanghai Automobile Manufacturing Plant are more interesting.

On the one hand, they passed the pressure to their partner Volkswagen, and on the other hand, they had new ideas about the positioning of Shanghai-branded cars.

"Director Jiang, our Shanghai brand sedans were once the best-selling sedans in the country."

"But now the monthly sales volume is less than 1000, and this is the result of continuous price cuts."

"But the brand influence of Shanghai brand cars is still there."

"Can we consider setting up a joint venture to operate Shanghai-branded cars, just like Hongqi and BMW?"

"Don't worry, the conditions in all aspects will definitely not be worse than FAW."

Yu Jin and Jiang Hui naturally knew each other.

In addition, Nanshan Technology is now a supplier to Shanghai Automobile Manufacturing Plant and Shanghai Volkswagen.

However, the Shanghai Automobile Manufacturing Plant, which was once quite glorious, is now facing a less than ideal situation.

If there had not been the previous cooperation between Hongqi and BMW Group as a reference, Yu Jin would probably have only been able to think of ways to change the situation internally.

Now that he has someone to learn from, he naturally wants to copy.

Anyway, even if the joint venture fails, he can find an excuse.

"Director Yu, our group is definitely willing to cooperate with the Shanghai Automobile Manufacturing Plant."

"But when FAW's Director Geng discussed cooperation with us, he mentioned some exclusive cooperation terms."

"If you can convince Director Geng to accept our establishment of a joint venture, I will definitely have no objection."

Jiang Hui actually didn't want to set up a joint venture with the Shanghai Automobile Manufacturing Plant.

If you have a new car model, wouldn’t it be better to produce it yourself and enjoy 100% of the profits?
Why should I give half to others?

The cooperation with FAW takes into account its special status in China's automobile industry, and it can be regarded as an additional insurance for the BMW Group.

However, as a local automobile factory, the Shanghai Automobile Manufacturing Plant's influence cannot be compared with that of FAW.

Even if the Shanghai Automobile Group develops well in the future, that is a matter for the future.

Now that BMW Group has been formed, it remains to be seen whether Shanghai Automobile Group will still have such a bright future.

However, even if I don't want to cooperate, it is definitely not appropriate to say it directly.

That's too offending.

So Jiang Hui immediately thought of putting the blame on Geng Weidong.

Anyway, he would make a phone call and explain it briefly later. He didn't believe that Geng Weidong would agree to BMW Group and Shanghai Automobile Group to set up a similar joint venture.

Doesn't that mean they are competing for resources with Hongqi and BMW?

This is definitely intolerable!
If BMW Group insists on its own way, FAW may have no choice but to accept it.

If you ask for his opinion now, Geng Weidong will definitely not agree.

Yu Jin was sure he could guess what FAW’s response would be.

"Director Jiang, the country has relevant regulations that allow foreign-funded automobile companies to establish no more than two joint ventures in China."

"Volkswagen established a joint venture with both us and FAW."

"BMW Group is also naturally allowed to set up two joint venture factories in China."

"I think even if FAW disagrees, it will not affect our cooperation."

Yu Jin didn't want to go to Geng Weidong to communicate himself.

He would never do something that is destined to have no results or even get people spitting in his face.

So he wanted to continue working on Jiang Hui.

Of course, he didn't dare to do anything rash.

Not to mention that Jiang Hui has a backer behind him, and this backer is their superior.

Just based on the current scale of the BMW Group, it is not something that Shanghai's automobile manufacturers can afford to provoke.

When you grow to a certain scale, your presence becomes a deterrent and influence.

"Director Yu, our group has had a history of cooperation with the Shanghai Automobile Manufacturing Plant for several years."

"We have always attached great importance to our commitments. Once we promise something, we will definitely do it."

"We also value our reputation with other customers such as FAW, and we will not go back on our promises."

Jiang Hui's attitude did not change at all, which made Yu Jin quite disappointed.

Are Shanghai-branded cars really going to disappear in the long river of history like this?

He was a little unwilling.

But he had no better solution and could only hope that the business of the joint venture would get better.

……

Just when the Chinese automobile industry was buzzing about the establishment of Hongqi BMW, an event that shocked the world occurred internationally.

1987年5月28日，19岁的德意志青年马蒂亚斯·鲁斯特驾驶着一架塞斯纳172轻型单引擎运动飞机，从赫尔辛基附近的马里阿密机场起飞。

Shortly after takeoff, Rust changed course and flew towards the polar bear country.

All wireless communication equipment except the radio compass was turned off, making the plane disappear from the radar screen.

Rust flew his plane through what was then considered an impenetrable Polar Bear air defense system.

During the flight, he cleverly avoided interception and radar detection by polar bears many times.

This included a downward dive that caused the aircraft to disappear from the view of the Polar Bear interceptor pilot and from the screens of ground radar.

Finally, after a long flight, Rust successfully landed the plane on the Polar Bear Red Square.

There were crowds of tourists on Red Square at the time, and people were shocked and curious when they saw the plane landing.

After Rust stepped off the plane, he shyly smiled at the crowd and distributed his autograph papers.

People initially thought it was a movie, but later realized it was a real event.

The Red Square plane incident shocked the international community and raised questions about the polar bear's air defense system.

It is considered a great military shame for the polar bears that an amateur pilot with only 40 hours of flying record was able to break through the polar bears' air defense network.

Needless to say, a large number of people within the Polar Bear Group are bound to be in trouble.

This news was also reported by some media in China.

But most people just treat it as a topic of conversation after dinner and do not fully realize its historical significance.

"Dad, there was some shocking news about the polar bears. Did you see it?"

After seeing the news, Jiang Hui immediately called Zhu Jiansheng.

He wanted to take this opportunity to discuss with Zhu Jiansheng again some of the things mentioned during the May Day holiday.

Zhu Jiansheng has now assumed his new post in the Machinery Industry Committee. He is busy familiarizing himself with the specific situation and visiting some places to prepare for the next step.

At this time, Jiang Hui's opinion is naturally very crucial.

"You mean the Red Square plane incident?"

"I heard that this matter caused a stir abroad and had a huge impact."

Zhu Jiansheng has naturally been paying close attention to news related to polar bears during this period.

So when I heard Jiang Hui say that, I guessed what the other party wanted to say.

"Yes, that's it."

"I think that although this incident is somewhat accidental, it does not necessarily mean that there is any major problem with the polar bear's air defense system."

"But for something like this to happen when polar bears are in decline, the impact is bound to be profound."

"I have a feeling that this will be a landmark event in the future development history of polar bears, and will further deepen the contradictions and dissatisfaction among polar bears."

"With the food crisis and the light industrial product crisis added together, I think the other side's willingness to ease relations with us and expand cooperation in military product exports will increase significantly."

Jiang Hui had prepared three big moves for Zhu Jiansheng to use as a new official.

Now Zhu Jiansheng hasn’t even used his ultimate move yet.

Taking advantage of this major historical event, Jiang Hui felt that the time was ripe.

Don't wait too long. Everyone will have become accustomed to Zhu Jiansheng's inaction within the Machinery Industry Committee, which would be bad.

A person's first impression is very important.

Once it is formed, the cost of reversing it is very high.

"Do you think I can now formally present the two proposals I proposed earlier to my superiors?"

Zhu Jiansheng was not stupid either, so he naturally understood the meaning of Jiang Hui's words.

During this period of time, he has been preparing for these two proposals.

Although various reports have not yet been fully completed, some basic data are already available.

If you really want to submit a proposal to your superiors, that's not impossible.

"Yes, I think now is the best time."

"It also allows your superiors to fully appreciate your sensitivity to international current affairs and your foresight."

"This impression is very important and is related to further development in the future."

Jiang Hui gave his reply very directly.

We should try to improve the level of our father-in-law as much as possible.

(End of this chapter)